On November 1,2009,Davis Company issued $30,000,ten-year,7% bonds for $29,100.The bonds were dated November 1,2009,and interest is payable each November 1 and May 1.How much is the book value of the bonds after the November 1,2010 interest payment was recorded,assuming the straight-line method of amortization is utilized?
A)$29,010
B)$29,100
C)$29,190
D)$29,280

Question

Quizplus · Accepted Answer

The straight-line discount amortization ($45) = Discount on bonds payable ($30,000 - $29,100) F1F1F1S1F1F1F10 20 semi-annual interest payments.The November 1, 2010 book value ($29,190) = The initial issue price ($29,100) + Two periods of discount amortization (2 F1F1F1S1F1F1F10 $45).

On November 1,2009,Davis Company Issued $30,000,ten-Year,7% Bonds for $29,100